Question about margin call

M

misterno

I got 50K ýn my margýn account

Strýke prýce $32
Optýon prýce $0.41
Current stock prýce $33.94

I want to sell put optýons and my broker's maýntenance ratýo ýs
%35

I do not want to borrow money, I wýll use %100 my own money

What ýs the stock prýce when I wýll be exposed to margýn call?
 
Didnt fully understand but if you dont wanna borrow your 50k is good for this in case there is an assignment:

32-0.41 = 31.59

50000 / 31.59 = 1582 shares

Rounded down to 1500 / 100 = 15 options contracts @ 32

Then you will never get a margin call.

My question is would u really wanna go all in in ONE STOCK?

Br Gustaf
 
Can't be answerd for several reasons:

1) You haven't indicated how many puts you're doing

2) Determining margin is more complicated than saying it's 35% (see below)

3) It would require a bit of time to set up the calculation (which I'm not about to do) :)


Standard margin is 100% premium + 20% of value of UL - OTM amount with a minimum requirement of premium plus 10% of the exercise price. Premium can be applied to initial margin req.

So that means initial margin is $525.80 per put and after applying the premium, SMA debit is $484.80

To determine where you get a margin call, you have to indicate the number of naked puts and then calculate at what UL price the "35%" margin requirement exceeds $50,000 (see #3 above)
 
Quote from Gustaf:

Didnt fully understand but if you dont wanna borrow your 50k is good for this in case there is an assignment:

32-0.41 = 31.59

50000 / 31.59 = 1582 shares

Rounded down to 1500 / 100 = 15 options contracts @ 32

Then you will never get a margin call.

My question is would u really wanna go all in in ONE STOCK?

Br Gustaf
More...

so how do u apply %35 maýntenance ratýo?

Is maýntenance ratýo only applýcable when we borrow money?
 
Quote from misterno:

so how do u apply %35 maýntenance ratýo?

Is maýntenance ratýo only applýcable when we borrow money?
More...

I was just telling you what happens at assignmen and as many contracts you can open not borrowing any money.

35% applies when the contracts are open.
 
you could just do it the oldtime way.

Short 1 put and see how you like it.

Maybe I'm missing something, but if this stock is so great that you are sure it's going up or at least isn't going to go down, why not just buy $50,000 worth?

Then you can be assured that you can lose your whole 50k without ever being bothered by a pesky margin call.
 
Quote from oldtime:

you could just do it the oldtime way.

Short 1 put and see how you like it.

Maybe I'm missing something, but if this stock is so great that you are sure it's going up or at least isn't going to go down, why not just buy $50,000 worth?

Then you can be assured that you can lose your whole 50k without ever being bothered by a pesky margin call.
More...

They say there are old and bold traders, which one are you ;)
 
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